Recently, while talking to remodeling company owners, two issues came up concerning staff. The first owner said, “I am considering firing my office manager because, in the long term, she is not someone I want to keep ‘on the bus.’ But in this downturn, should I hold on for a while so I don’t need to train ...?”
I recommended that he replace this office manager with someone who will deliver more value to the company, who shares his values, who is a problem-solver, and with whom he will enjoy working. The economic downturn is challenging, but one silver lining is the wealth of talented people looking for a professional home. And it’s an employer’s market, so his next superstar may be willing to come on for less than in previous years. While the idea of training a new employee seems daunting, he will probably have the opportunity to hire a great employee with enough experience that extensive training won’t be necessary.
Before the remodeler terminates the current office manager’s employment, he should have a plan to handle her responsibilities until a new office manager is found. Perhaps bringing in a temp, using the services of a bookkeeper from his accountant’s company, or finding an organized friend who can tackle many of the projects that must be done.
The second remodeler asked, “I am considering hiring an office manager. How do I budget for a ‘worst-case scenario,’ and how conservative should I be? My company is moving along fine without this position, but there are some things like marketing, human resources, and other high-impact activities being neglected since I am overworked. How do I judge the expansion of my now low overhead, compared with hedging my overhead/profit by not hiring?”
I worked with the remodeler on budgeting and we determined that he would have to find, sell, and produce an additional $180,000 to cover the costs of an office manager and maintain a 35% gross profit margin. With an average job size of approximately $60,000, the company would need three additional projects. I asked, “If you could hand off all the administrative duties you currently handle, freeing up 15 hours of your time each week, could you reach this goal?” The answer was a resounding Yes.
If he wasn’t comfortable with the additional sales and production necessary, he could hire a subcontractor or part-timer. The sub would require a higher hourly fee but there wouldn’t be payroll burden. University students are an excellent resource for implementing a variety of marketing tactics such as mailings or making phone calls.
An owner’s time should be spent on the highest-impact activities in the company, and in this economy, sales and marketing lead the pack. If you can hire other people to handle lower-level tasks, do it!
—Victoria Downing is president of Remodelers Advantage, helping remodelers build consistently profitable companies. www.remodelersadvantage.com; 301.490.5620.